Good morning, good afternoon and good evening. Welcome to Lenovo’s Investor Earnings Webcast. This is Jenny Lai, Vice President of Investor Relations at Lenovo. Thanks, everyone, for joining us. Before we start, let me introduce our management team joining the call today. Yuanqing Yang, Lenovo’s Chairman and CEO; Wai Ming Wong, Group CFO; Luca Rossi, President of Intelligent Devices Group; Ashley Gorakhpurwalla, President of Infrastructure Solutions Group; Ken Wong, President of Solutions and Services Group; and Sergio Buniac, Senior Vice President of Mobile Business Group and President of Motorola. We will begin with earnings presentations. And after that, we will open the call for questions. Now, let me turn it over to Yuanqing. Yuanqing, please.

Hello, everyone and thank you for joining us today. Last quarter, thanks to our strategic foresight, continuous innovation, and operational excellence, Lenovo delivered a strong growth across all core businesses, driving significant increase of overall global revenue and profit. We are also pleased that the adoption and application of AI is accelerating, driven by innovative technologies that are more efficient and at a lower cost, creating huge growth opportunities. We continue to lead in Personal AI with our AI device innovations, while proactively leveraging hybrid infrastructure and our Hybrid AI Advantage to build enterprise AI, so as to further drive sustainable growth and profit improvement. Last quarter, our group revenue grew double-digit year-on-year for three quarters in a row. Profit growth was even stronger with the group net income, more than doubled year-on-year on a Hong Kong FRS basis. Such a fantastic result is attributed to the excellent performance of all core businesses, from the successful turnaround of ISG driven by its continuous fast growth to the double-digit year-on-year revenue growth momentum of both IDG and SSG. Our diversified growth engines continued to accelerate, propelling, our non-PC revenue mix to more than 46%. We continued to increase investment in R&D with a focus on AI, dedicated to building a foundational AI technology platform, exploring use case breakthroughs in agentic AI, as well as continuously developing technologies and their applications into products. At the CES 2025, for the last month, we launched a series of innovative products, including the world's first rollable AI laptop, the world's first gaming device that allows gamers free choice of Windows OS or Steam OS, as well as Moto AI, winning wide attention and high praise. Right now, the AI boom is clearly creating enormous opportunities for continued growth in the market of device IT infrastructure and IT services. The reason the phenomenon rise of the new model with its higher inferencing efficiency and the lower computing power cost is providing a more realistic path for the democratization and application of AI. This will not only accelerate the maturity process of On-Device AI and Edge AI, but also promote and accelerate the deployment and customization of enterprise AI, which aligns seamlessly with the vision of hybrid AI that Lenovo pioneered. With our constantly improving full-stack AI capabilities and portfolio, Lenovo is well prepared to drive the realization of personal AI and enterprise AI. Now let me talk about each of our businesses. Let's start with our Intelligent Device Growth or IDG. Its revenue, once again, achieved the double digital growth year-on-year. For PC, we strengthened our market leadership position, with the gap with the second player further enlarged to almost five points, while maintaining the industry-leading profitability. Within six months of its launch in the China market, our five-feature AI PC has exceeded our expectations of its mix in the total notebook volume, well ahead of the original plan. For Smartphone, we continued the momentum of double digital revenue growth, with particularly hyper growth in Asia Pacific and the EMEA markets, which significantly drove up our shares in many markets. Looking ahead, we will continue to drive the convergence of more powerful computing and more efficient models into various types of devices, while driving device form factor innovation. We will also optimize our AI agent capabilities, enhance our multi-device connectivity, build our key applications ecosystem, so as to provide a seamless user experience across devices and across ecosystems. Next, our Infrastructure Solution Group, or ISG. Last quarter, ISG delivered almost 60% year-on-year growth in revenue and achieved a break-even. This was driven by the continued hyper growth of our CSP, or Cloud Service Provider business, that reached a historical high, as well as the steady growth of our Enterprise SMB business. Our AI server business started generating steady revenue, and our industry-leading Neptune liquid cooling solutions also made the headway beyond supercomputing and academy into wider vertical industries. Indeed, it was no small feat turning around our ISG business. The credit here has to go to the firm execution of our right strategy. Back when the market started shifting to cloud computing, we had set our minds to developing both the traditional ESMB and the emerging CSP businesses, and never to lose sight of one or the other. Over the years, we have built a CSP business from the ground up with a unique ODM+ model, sticking with it despite its impact on our overall profitability at certain phases. Today, we are on the way to building a $10 billion CSP business with self-sustained profitability. We are leveraging the skill that we built with CSP to improve the cost effectiveness of our ESMB business, and ultimately secure the sustainable profitability of our overall ISG business. Looking ahead, as a Hybrid AI needs to be supported by hybrid infrastructure, there will be a lot of demand for public clouds, as well as on-prem data centers, private clouds, and edge computing. We are confident that by continuing with our strategy and through further simplifying our product portfolio, strengthening our go-to-market capabilities, and optimizing our ESMB business model, we will achieve sustainable profitable growth with our ISG business. Our SSG, Solution & Service Group, has continued its double-digit revenue growth to a record high, with an operating margin of 20%. While support services remained our strong profit engine, with improved profitability, the revenue mix, combined from Managed Services and the Project & Solutions Services, as our growth engines has grown five points year-on-year to a record high of almost 60% of SSG's total business. Our AI solution business also started to build the lighthouse cases for top customers. For example, we delivered our enterprise AI agent platform for our leading diary company that can seamlessly integrate diverse AI applications. Looking ahead, we will continue to build the capabilities and the Hybrid AI Advantage framework and establish advanced AI tech center to empower our enterprise customers with intelligence. Before I close, I want to emphasize that to succeed in the largest scale high-tech manufacturing industry that we are in, scale is the key. In PCs, we drove the expansion of consumer business as a complementary to our stronghold in commercial business and to become the global leader and firmly stay there. In mobile phones, we refused to settle for the Latin American and North American market and made our move firmly into the Asia Pacific and the EMEA markets, even if we need to invest a lot of resources, both financially and time-wise, all with the aim to build our most scaled business foundation for sustainable and profitable growth. The same can be said of our infrastructure business where we endured temporary losses for our strategic intent, just as I explained earlier. Therefore, you can say that through the years for each of our core businesses, we have consistently chosen to be flexible and adaptable scaling to secure our win first and the greater profitability will naturally follow as a result. Looking ahead, equipped with our continuous investment increase on AI innovation, our global footprint expansion with our allotted strategic partnership, our brand equity through FIFA and Formula 1 partnerships and our excellent and resilient global operation, we will continuously navigate macro uncertainties and realize our vision of Smarter AI to All in the near future. Thank you. Now, let me turn it over to our CFO, Wai Ming. Wai Ming, please.

Thank you, Yuanqing. I will now take you through Lenovo's financial and operational performances for Q3 in fiscal year 2025. Next slide, please. Q3 has been a period of strong growth and innovation. The group beats market expectations with net income surging by 106% year-on-year and revenue up by 20% to a three-year record of $18.8 billion. Revenue grew by double digits across all business groups and geographies, showcasing the company's strategic foresight, continuous innovation and operational excellence. Non-PC sales rose four percentage points year-on-year to account for 46% of sales across the three business groups. The Smartphone segment achieved a record market share of FYQ3 and elevated its industry ranking to become a top five vendor in global market outside of China. ISG new sales record demonstrated remarkable 59% year-on-year growth, achieving profitability driven by the continual hyper growth of our CSP business. We are progressing towards establishing a $10 billion businesses with sustainable profitability by optimizing scale in the profitable CSP segment and enhancing cost efficiency for ESMB, ISG is building a sustainable and profitable growth trajectory. In tandem with this growth, the strategic initiative in capturing the full potential of hybrid AI have unlocked significant innovations, including the award-winning five feature AI PC at CES, further solidify Lenovo's leadership in personal AI, while they enrich AI Advantage and hybrid infrastructure help to drive enterprise AI. The ongoing breakthroughs in new large language models, particularly remarkable inference efficiency and lower computing power cost should bode well for the takeoff of AI applications. The group is well positioned to benefit from this industry trend with its unique broad exposure across infrastructure, edge, services and solutions with a target to drive unified AI agent user experience across multiple devices. There was a one-time non-cash accounting gain of $282 million in the quarter, primarily due to an income tax credit resulting from reorganizing of certain group activities in the quarter. These are operational changes to support future growth and are part of our wider global digital transformation programs designed to better service and support our customers locally, as well as respond to market demand. The group's basic earnings per share were 5.66 US cents. Next chart, please. The robust business fundamentals and efficient capital management led to solid net cash generation, resulting in a 14% increase year-on-year in cash balance to nearly $4 billion in total. The cash conversion cycle improved by one day year-on-year and by six days from the last quarter. The group's healthy liquidity is critical to supporting a 14% year-on-year increase in R&D investment, driving hybrid AI innovations. Finance costs were reduced by 3% from the last quarter, but increased 10% year-on-year. Growth changes were smaller than the growth in revenue, highlighting the importance of several cost-saving initiatives. These initiatives include the optimization of supply chain management, which enhanced our liquidity management. Next chart, please. IBG revenue surpassed expectation with a 12% annual growth, while segment profitability reached 7.3% at the high end of its historical range. This performance is a testament of IBG's ability to sustain industry-leading profitability. In the PC segment, IBG achieved the highest market share over the past five years and extended its lead over the next two competitors. The premium mix improved on strong gaming demand and recovery in commercial sales, driven by the Windows 11 refresh and premium workstation sales. Smartphone revenue posted double-digit growth, setting a record for fiscal third quarters in the last nine years. Its market ranking reached a five-year high in market outside of China, driven by strong growth in Asia Pacific and EMEA regions. High-end Razr and Edge models performed exceptionally well, pushing the Smartphone premium revenue mix to over 30%. The takeoff of personal AI is on track to accelerate support by advancement in computing hardware, efficiency improvements, and rising popularity of AI agents. The IBG remained the industry leader in personal AI, showcasing over 60 innovations at CES in January this year, redefining AI device categories across commercial, gaming, and consumer segments. Within six months of its launch in the China market, Lenovo's five-feature AI PC has exceeded expectations of its mix in a total notebook shipment, solidified the market leadership in hybrid AI through proprietary AI software and multi-device connectivity among PCs, Smartphones, and Tablets, adding unique values for users. Next chart, please. ISG has an exceptional quarter, achieving record-breaking revenue with a 59% year-on-year growth and a successful turnaround, resulting in a $39 million year-on-year profit improvements. These milestones reflect the effective execution of the right strategy and lay a solid foundation for sustained profitability. The skill focus on CSP and ESMB offer a distinct competitive advantage. ISG focused approach to scaling the CSP business with this unique ODM+ model focused sales strategy is yielding positive results. The CSP segment is not only profitable, but also has seen its revenue more than quadruple from five years ago, now contributing a double-digit percentage to gross sales. The business group plans to leverage this skill to enhance the cost-effectiveness of the ESMB business, ultimately securing sustainable profitability. ISG is achieving strong progress in revitalizing the ESMB segment. We saw continuing year-on-year revenue growth for the three consecutive quarters by optimizing ESMB business model, fostering go-to-market partnerships, and identifying cost-saving opportunities through portfolio optimization. Turning to AI, ISG saw increasing revenue contributions from AI service last quarter, supporting by robust order load set to convert into future revenue. A key differentiator for ISG in this space, it is Neptune liquid cooling technology. This proprietary solution addresses the growing challenge of managing higher power consumption in advanced AI service. What's exciting is that Neptune's adoption is expanding. Initially focused on supercomputing and academia is now being applied across various commercial industries, including automotive, electronics, finance, and natural resources. To enhance its global enterprise storage offerings, ISG announced definitive agreement to acquire Infinidat, which is subject to regulatory approval before closure. Next chart, please. SSG deliver a strong quarter by leveraging AI-powered services and solutions. Revenue grew by 12% year-on-year to record $2.3 billion, making the 15 consecutive quarters of double-digit year-on-year growth. SSG operating margin remain above 20%, contributing 31% to the overall operating profit of the three business groups. Both Managed Services and Project & Solution Services report revenue growth rates of nearly 20%, now accounting for 59% of SSG total revenue, up five percentage points from previous years. In Support Services, hardware growth and improved penetration rates further bolsters its booking, reinforcing SSG ability to deliver future growth. AI-powered portfolio continue to drive momentum for attached services with elevated hardware user experience. To seize hybrid AI opportunities, SSG actively offers a suite of solutions tailored for customers, enabling self-configured AI agents. Its Hybrid Cloud and Digital Workplace Solutions continue to improve and expand, incorporating agentic AI and enabling seamless integration across diverse AI applications. Next chart, please. Hybrid AI offers an unparalleled potential and the group at CES 2025 unveiled a range of AI-powered on-device and agentic solutions aimed at enhancing business experiences. The group has shown remarkable resilience, thanks to the strategic expansion into hybrid AI and a robust global manufacturing network. The group addresses challenges and capture growth with continuous increase of investment on AI innovation, the global footprint and the brand equity through FIFA and F1 partnerships. Our strategic partnership not only enhances our balance sheet but also provide robust support for our future growth and expansion initiatives. As AI hardware continues to upgrade and model training efficiency improve, AI software and use cases will evolve, driving growth in personal AI. IDG's AI PC innovations focuses on hardware, proprietary software and components will enhance differentiation and pave the way for personal AI twin, driving higher ASP and sustainable profitability. Additionally, IDG's Smartphone growth will continue to propel its premium to market growth. ISG is set for sustainable growth and profitability through its dual strategy across CSP and ESMB segments, as well as differentiated full stack portfolio. In CSP, ISG will leverage its ODM+ business model to scale operations, capture cloud growth opportunities, diversify its customer base and optimize cost. In ESMB, ISG focuses on portfolio optimization and channel enhancement to strengthen competitiveness and balance revenue streams. Innovations like Neptune liquid cooling technology further position ISG for efficient, sustainable AI workload deployment. SSG targets to deliver fast and reliable AI outcomes, empowering organizations to transforming data into actionable business results and accelerating AI adoption across industries. Meanwhile, SSG is accelerating its strategic collaboration with ecosystem partners. This dual strategy enhances SSG financial contributions to the group, reinforcing its role as a leader in AI powered solutions. Our commitment to sustainable growth and enhanced profitability remain at the forefront of our strategy. We actively pursue both organic and inorganic avenues to unlock optimal growth for our business. Through continuous innovation, we are poised to sustain our upward trajectory and deliver exceptional value to our shareholders. Thank you. We now take your questions.

Thank you, Wai Ming. Now we are open the floor for questions and this session will be in English only. Please be reminded to limit yourself to two questions at a time. Other than our Chairman Yuanqing Yang and CFO Wai Ming Wong, we also have the following business leaders with us today for Q&A, Luca Rossi, President of our Intelligent Devices Group; Ashley Gorakhpurwalla, President of our Infrastructure Solutions Group; Kin Wong, President of our Solutions and Services Group; and Sergio Buniac, Senior Vice President of Mobile Business Group and President of Motorola. Without further ado, operator, please announce the instructions. Thank you.

To submit a question, please type your question in the Q&A box on the right and click submit.

Thank you. The first question is coming from Albert Hung at JP Morgan. His question is, after ISG spread even, does management has a target for ISG profitability in next one to three years? What's the role of AI server in driving this target? Ashley, would you like to take this question?

Yes, thank you. Thank you for the question, Albert. This is Ashley Gorakhpurwalla, introduced earlier, I'm the President of Infrastructure Solutions Group, recently joining the leadership team at Lenovo. We do, first of all, think through the profitability of ISG that, as Wai Ming and YY both mentioned, that we've reached break-even as a nice milestone. And we have set goals for profitability going forward. I don't think we're prepared to discuss future guidance at this point, but we are focused on sustained long-term profitability for both of our CSP and our enterprise businesses. And relative to the impact of AI servers within that, we believe firmly and are confident that AI servers will drive a very strong capital investment cycle for infrastructure in the markets that we serve. And we believe that will come in two phases, the continued investment in infrastructure for a large language model and gen AI development, and also in enterprise AI demand that's expected to grow as well as become more efficient and more available to our enterprise customers. Both of these AI server growth vectors will likely be limited by power. And so as we've mentioned before, we think we're best positioned in the industry with our Neptune cooling technology to help our customers move towards a much more efficient infrastructure capability, whether it's in CSP, tier one, tier two, next wave our enterprises. And so this AI server growth will be likely very much a power question. And Lenovo is, with Neptune being a water-based, highly efficient cooling system, will likely be the best position to help our customers through that transformation.

Thanks, Ashley. And the second question is from Steven Liu at GF Capital. What's your 2025 CapEx and how much will be using AI investment? Is there any refinancing plan that's maturing in April this year? Wai Ming, would you be able to answer this question?

Okay, so well, thank you for the question. As you probably know that we recently closed the transaction from Alat which actually giving us about $2 billion in capital. I think we definitely have enough capital for investing in innovation as well as developing the business activities. Now, while AI is the main theme, I think most of our capital expenditure somehow will be related to AI, did on the device as well as the infrastructure, as well as services and solution. I don't actually have a specific percentage, but I can assure you that we'll maintain continue our investment in our R&D. And a large part of that actually AI related. Thank you.

Thank you, Wai Ming. And the third question is from Binying Chen with Schroders. Trump administration intended to lay the 10% to 25% tariff on imports to the US. Could you share your production exposure, especially to Canada and to Mexico? And what's the view on the potential financial impact and are there any actions planned for this? Yuanqing, would you be happy to take this question, please?

Yeah, so although we are still assessing the impact, but overall, I don't think it has any significant impact to our business and to our future performance. It's not new to Lenovo. So many other countries that have that kind of policies like Brazil and India. So actually it's not a disadvantage, but probably an advantage for Lenovo. We have already built a very strong and a unique business model. We call it the ODM+ model. We do both in-house manufacturing and outsourcing manufacturing. And we have a global manufacturing footprint. We have built more than 30 manufacturing facilities in nine to 10 countries, Argentina, Brazil, India, Japan, Hungary, Germany, Mexico, US. Now we are building the new one in Saudi, so definitely in China as well. So compared to our competition, we are more flexible and resilient to adapt to different scenario. So we are pretty sure, so not only we can ensure our competitiveness in the market, but also protect our profit and performance.

Thank you, Yuanqing. And the next question is a follow-up question from Albert at JP Morgan. What is your IDG business outlook? Does Lenovo see upside in new gaming PC cycle? Has the replacement cycle of Windows 10 already started? Luca, would you kindly take this question, please?

Yeah, thank you, Jenny. And good evening, good afternoon to everyone. Thanks, Albert, for the question. So I will say that we have strong confidence looking at our PC business trajectory entering into the new fiscal year. We have modeled the market to grow mid-single-digit to high-single-digit. And within this context, we are planning to continue to grow at premium to market, hence gaining share on top of the market growth. And here, the usual tailwinds that we have been discussing before, a large and now a very large install base due for replacement, the Windows 10 end of service. On this one, as you mentioned, I think we are definitely in our dialogue with customers seeing this is getting stronger. So we expect the second half of calendar 25 to see an acceleration of this factor for acceleration of the market growth, as well as the rise of AI PC driving, again, our dialogue with the customers is saying this is driving excitement for replacing devices with more premium devices and including a lot of innovation in the gaming sentiment, gaming PC segment that you have mentioned. At Lenovo, we are working hard, Albert, to innovate in AI PC. We already lead the market of AI PC, no matter which definition you take, we are the number one globally. And we are confident we will keep this position with innovation, with differentiation. We have our own AI agent, AI Now. We have a unique position with the ecosystem experience with PC, phone, tablet, and all the other IoT devices, all connected with our IP, Smart Connect. So with all this differentiation combined with our scale, that should pay well for us so that we can maintain and even expand our ability to deliver industry-leading profitability, which is obviously very important. Thank you.

Thank you, Luca. And the next question is coming from Ken Chen with [Taitung] Investment. Will you be able to get more orders from Middle East customers now? How do we assess the revenue contribution from Middle East customers for the next fiscal year? Wai Ming, would you like to answer first and maybe anyone on the floor with additional details to follow? Thank you, Wai Ming.

Yes. Well, thank you for the question, Ken. Definitely, I think that will be, I think the outlook for our businesses in the region is going to be very, I think, exciting and interesting. But bearing in mind that we are quite close to transaction in January, I think the very first major event to promote and showcase Lenovo capability actually happened about three weeks ago, when the Saudi actually host, I think, an event called LEAP. I think for those who are not familiar, the LEAP is actually equivalent to CES in Saudi Arabia, where our CEO is actually on stage, I think, showcasing our cooperation, I think, with Alat. I think thereafter, we are actually, different business group, I think, very, very meaningful, very, very effective meeting with, I think, the relevant big customers, I think, showcasing our capability. I think at this point in time, it probably would not be possible for me to give you a number, but I can assure you that I think with the capital, with our presence, with the help of Alat, I think the business in KSA or the region probably will have meaningful improvement. Maybe we can actually share a little bit more as and when we're actually going into the next fiscal year, because as I said, we only closed the transaction in January. I think this is just about four weeks away after we closed. Thank you.

Thank you, Wai Ming. So the next question is coming for SSG. What accounts for SSG's year today? Revenue growth rates being slower than the hardware business, and what is the growth outlook for SSG? Ken, would you be able to respond to this question? Thank you.

Sure. Thank you. Thank you, Jenny. Good morning, good evening, everyone. So I think what is important to us is if we look at our Q3 result, a few things. One is this is one of our highest revenue quarter since we have SSG globally. We were able to grow at double digit on a year-to-year basis for the 15th consecutive quarter. And indeed, if you look at the addressable market and the IT services that we are capturing, we are at 2x faster growth than the market. And at the same time, if you look at the profitability that SSG is achieving, we are maintaining a 20% operating margin level. So when I look at overall, Q3 is a very strong quarter for SSG within Lenovo and continue to be a key contributor from a top line and bottom line perspective. Now, if we look at the market demand, I think we will continue to see strong demand from our customer with regard to as a service, as well as digital workplace solution, hybrid cloud, partly coming from the AI demand, and also sustainability. Indeed, Q3 is one of the biggest quarter for us in SSG in terms of total contract signing. So with the latest development in the AI industry in terms of breakthrough in technology, we continue to expect, we're able to capture the demand and market. This is what customer is asking for, to see how can we implement AI and bring the true business outcome for our customer leveraging AI. So you know, we're still confident that we're able to grow at a premium to the market, and also maintaining at a reasonable operating margin level. Thank you.

That's great, Ken. The next question is coming from Cherry Ma with Macquarie. And Cherry has a couple of questions. The first one is the ISG's pace to profitability in the last quarter. She would like to know more details, and she also wants to know the path to better profitability in the following quarters. Second question, can you touch upon, one, the production makes shift between higher margin and lower margin customers or products? And two, the ramp up of your GPU server business? And three, how were we able to win over a new billion dollar customers versus competition? Ashley, would you be able to respond to this question? Thank you.

Sure, thank you. Thank you for the question, Cherry. I'll take the questions a little bit backwards in that I'd like to talk about the profitability in the framework of how we've discussed it already, which is our CSP ODM+ model and our enterprise business. So how we think about attracting customers and acquiring customers and retaining customers in our CSP business, including those who have a billion dollar spend with Lenovo, is really about the factors we've talked about before, which is a world-class industry-leading manufacturing network and supply chain that we can bring to bear on behalf of our customers across a global footprint. And that's highly differentiated in this space. We also then can pair that with outstanding quality of both delivery and product that takes advantage of the innovation across Lenovo in a great deal of R&D capability across the globe. So that's a very attractive partner for large customers, including those who have capital budgets that exceed several billion dollars. And we continue to attract customers that we believe can continue to grow into that space and that level of spend with us as we go forward. Our CSP business is wide and wide and wide, meaning it's highlighted not only as hyper growth, but as a cost to spend that allows a profitability that we're satisfied with and have set expectations on improving that as we go forward. To maybe talk a little bit more generally, I don't think we want to necessarily get numbers around our GPU server business, but its meeting expectations as we grow. We'll be time to market with our strategic partners in accelerators, whether it be NVIDIA, AMD or other accelerator vendors that we're working with today. And we'll have systems and capability and solutions that incorporate their technology when those partners reach their high volume general production. And that's important to our customers so that we can help them with those transitions. Again, including in many cases, our Neptune cooling systems dealt them with power efficiency in their data centers. And then finally, on the mix, we really think the mix around margin going forward for a sustainable approach goes back to helping our customers in the enterprise segments and the media business segments and offering them an optimized and differentiated portfolio of infrastructure solutions that really not only help transform their businesses with enterprise AI, but also hybrid cloud and modern IT workloads. I think we also are highly focused and improving in our channel go-to-market partnerships. And we are continuing to offer into the marketplace co-engineered and innovative solutions with our technology partners, especially around storage solutions that complete the infrastructure solution for our customers, and also in helping them with virtualization, containerization and other workloads. Additionally, and maybe Ken can chime in on another question, but I think helping our customers, especially our enterprise customers with a framework such as the Lenovo Hybrid AI Advantage is really differentiated and an opportunity to add value to the customer and then have value return to Lenovo for what we can do to help them transform for their AI infrastructure. Thank you.

Jenny, so I want to add something on our ICG business. So we are definitely very confident. So you will see this business will not only grow strongly, but also improve its profitability. So actually, this is a strategy we have set for this business for many years. So when we purchased the IBM server business 10 years ago, it was just focused on enterprise SMB business, not today's CSP or hyperscale business at all. But we realized that CSP will change the landscape of the industry. So unlike competitors who focus only on enterprise SMB business and ignore CSP, we build the CSP from scratch. But of course, you need to build on your capabilities. So our capability is our unique ODM+ model, in-house plus outsourcing to give us advantages. In-house gives us flexibility to meet the customer's requirement, to maintain quality, customize products and the outsourcing allows us to benchmark with the industry's best practice and ensure competitiveness. So in addition, CSP business keep us close to leading technology trend so that we can apply the latest advanced design to ESMB business as well. So we have built a very strong CSP or hyperscale business today, close to $10 billion a year. So that gives us the scale and advanced technology. So with this scale and the technology, we can improve enterprise SMB business for its capabilities and profitability. So that's our business model. We have seen the first step success and we are confident to see further progress. So in fact, the concept of building complementary businesses and scaling into profitability is no stranger to us, in Lenovo history. So our PC business acquired from IBM, the ThinkPad business, only performed on the commercial side outside China. But so during the 2008 global financial crisis, our commercial PC demand declined sharply. So we built the consumer business on top of the commercial business. So over time, so this scale helped us to become the global market leader in PCs with the industry leading profitability. So I strongly believe we are replicating this kind of success for our ISG business, scaling into sustainable profit. So this one-time breakeven is just the beginning.

This is great, Yuanqing. And thank you, Ashley, as well. So we now move to the next question for our Mobile business. Congratulations on successful Smartphone business. What strategies do you have in place to further accelerate the Smartphone shipment goals in the future? Sergio, would you be able to take this question, please?

Yeah. So hello, everyone. Thanks for the question. So indeed, our best Q3 ever for Motorola business. We grew units and revenue faster than units. We were the fastest growing OEM through IDC for the quarter and for the full year. But in the near future and long-term future, our goal is still to be a double-digit premium to market and to become the number three player outside China, as we stated before. When you look to the streams of revenue growth, we see a continuing increase in our premium mix through the reception of our Edge and Razr franchise. We are also entering new segments in markets like North America, where we are number one in prepaid. We were number one in prepaid and for the last quarter, but now a lot of growth seen from the postpaid business. We expect Latin America to see a premium to market in the near future, covering a small loss of share we had last quarter, but we see that temporary. And we are also opening new markets in Asia. We just launched Indonesia actually yesterday. We are seeing a very strong reception. Actually, our search Indonesia for the products were similar to the size of India, half of the size, what proportionally was a very good reception for new markets. And of course, you still see a lot of growth opportunities in markets where you're delivering, including Japan, India, Italy, Poland, and some other markets. And finally, not less important, EMEA with the [Radio] is a huge opportunity. We're seeing a lot of traction and expect strong growth in the near future. And our B2B market continues to grow at a high double-digit point. So, growing from different segments mixed, we're still seeing a high premium to market for the next at least 18 months to 24 months.

Thank you, Sergio. And now we'll move to the next question coming from Howard Kao with Morgan Stanley. And how should we think about your IDG margin trend in the coming quarters? And the lower component pricing should be a tailwind, but there's also this tariff impact as well as production relocation impact. So, should we expect margins to stay flat? Luca, I'll invite you to talk about the overall IDG margin and maybe Sergio to talk about the Smartphone margin. Thanks.

Yeah, thank you, Jenny. So, I will talk about the PC margin and then we'll have Sergio for the Smartphone. So, thank you, Howard. As you know, we have truly a world-class supply chain and a unique business model. And we have a combination of our own manufacturing and outsourcing. As well, we have the presence of our own factories in many countries globally. So, I will say, no matter what will be the tariff environments globally, we feel we are very well ready to compete and even to turn this into a competitive advantage vis-a-vis our peers. So, to answer your question, overall, we are looking at minimum maintaining our margins over time and expanding them through differentiation in products, growth of our commercial and premium devices mix, expansion in adhesions, visual accessories, and others. Monetization opportunities that we see will come with all this AI-agentic world, services opportunities, as well through expanded profitability with operating leverage, larger scale, and our usual expense discipline. So, I think overall, we feel good about that and should feel good about that. Thank you. Sergio?

Yeah, I think nothing much to add. I think we see the same trends as PC, the manufacturing footprint bearing on the cost, less pressure on component costs in the near future. But I think very important, as we achieve global scale, as we grow the business at 20%, like we are growing today, double-digit, we should see benefits of scale and monetization of the devices in the near future. So, in the last 18 months, a very small decline given the new mix of new geos and as we grow in new regions. But moving forward, we see the margins going slightly up to the things that Luca mentioned that are similar to PC with Smartphones, plus the benefits that should be seen as we scale the business in this triangle of monetization engines. Thank you.

Thank you, Luca and Sergio on this question. And we have one more question from Cherry Ma with Macquarie. For the ISG business in the US, how is the progress in building our ESMB distribution channel expansion? Are we still subscale or already becoming profitable this quarter?

I'll take that.

Yes, Ashley.

I’ll take that question.

Thank you.

Thanks for the follow-up, Cherry. Across all the geographies for ESMB, I think we've seen double-digit year-on-year growth. So, we're seeing a growth for Lenovo in the space that implies quite a bit of progress in that for the segment in the marketplace, we would be growing faster than competition. And so, we're pleased with that. But across all the geos, I think we have much more expansion to do and many more customers that can take advantage of our innovation and our technology and our services. So, we're not satisfied with our level of progress in ESMB at this point. And we'll continue to, as I talked about earlier, really focus on the key elements of growing that business profitably.

Thank you, Ashley. Great. Now, we are coming to the last question for our webcast due to limited time. This is a question from Ken Chen with Taitung. How does Lenovo get more cooperation with DeepSeek? What is the potential collaboration for your device and infrastructure business? And Yuanqing, could I invite you to respond to this question? Thank you.

Thank you, Ken, for the question. So, DeepSeek, based on our assessment, has a very positive impact for Lenovo, for our business. So, it further proves that our hybrid AI has always been the right strategy and that we have been on the right path by deploying distilled small models for local devices at edge. DeepSeek improved AI efficiency, driving the democratization of AI. So, it uplifted the potential of locally deployed AI models, pushing the wide adoption of edge AI and on-device AI. So, it may also indirectly boost the growing demand for GPU servers. So, all of these are aligned with our hybrid AI strategy and will benefit all our businesses. More specifically, on the personal AI side, we have always been talking about AI will exist not only on cloud, but on-prem, on-edge, and on individual devices. So, DeepSeek proves this trend will only accelerate. So, on on-device AI models, we are already offering users access to DeepSeek's public cloud services, so, our AI PCs and other devices. So, we are launching our AI workstation deploying a local DeepSeek-R1 distilled model up to 7 billion parameters. So, this is a model size that just a few years ago could only be run on public cloud platforms like Chat-GPT 3.0. But today, we can do it entirely locally. So, that can enhance every individual's productivity while protecting your data and privacy. On the enterprise AI side, so DeepSeek has proven that AI deployment is not necessarily expensive and made the ROI case more convincing. So, this would help change enterprise customers' perspective and accelerate adoption. So, we can expect the broader use of AI solutions creating more opportunities for our hybrid AI advantage so that it can drive growth in our ISG and SSG business. So, that's my assessment on the DeepSeek impact on Lenovo, a disruptive innovation that will benefit us. Thank you.

Thank you, Yuanqing, that's great. And thank you, management team on the call as well. We thank you very much for joining today's meeting. If you have any further questions, fell free to contact Lenovo IR team directly. The replay of this webcast will be available in the next couple of hours at investor relations website. And this concludes our meeting today and thank you again for joining us. Bye-bye now.